Correlation Between RLJ Lodging and 871911AT0
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By analyzing existing cross correlation between RLJ Lodging Trust and US871911AT09, you can compare the effects of market volatilities on RLJ Lodging and 871911AT0 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in RLJ Lodging with a short position of 871911AT0. Check out your portfolio center. Please also check ongoing floating volatility patterns of RLJ Lodging and 871911AT0.
Diversification Opportunities for RLJ Lodging and 871911AT0
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RLJ and 871911AT0 is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding RLJ Lodging Trust and US871911AT09 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US871911AT09 and RLJ Lodging is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on RLJ Lodging Trust are associated (or correlated) with 871911AT0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US871911AT09 has no effect on the direction of RLJ Lodging i.e., RLJ Lodging and 871911AT0 go up and down completely randomly.
Pair Corralation between RLJ Lodging and 871911AT0
Assuming the 90 days trading horizon RLJ Lodging is expected to generate 1.06 times less return on investment than 871911AT0. In addition to that, RLJ Lodging is 2.17 times more volatile than US871911AT09. It trades about 0.16 of its total potential returns per unit of risk. US871911AT09 is currently generating about 0.37 per unit of volatility. If you would invest 9,682 in US871911AT09 on October 24, 2024 and sell it today you would earn a total of 83.00 from holding US871911AT09 or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.0% |
| Values | Daily Returns |
RLJ Lodging Trust vs. US871911AT09
Performance |
| Timeline |
| RLJ Lodging Trust |
| US871911AT09 |
RLJ Lodging and 871911AT0 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RLJ Lodging and 871911AT0
The main advantage of trading using opposite RLJ Lodging and 871911AT0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RLJ Lodging position performs unexpectedly, 871911AT0 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 871911AT0 will offset losses from the drop in 871911AT0's long position.| RLJ Lodging vs. Diamondrock Hospitality | RLJ Lodging vs. Summit Hotel Properties | RLJ Lodging vs. Pebblebrook Hotel Trust | RLJ Lodging vs. Sunstone Hotel Investors |
| 871911AT0 vs. AEP TEX INC | 871911AT0 vs. US BANK NATIONAL | 871911AT0 vs. Cheniere Energy | 871911AT0 vs. Targa Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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